Senate Passes Budget, Back to Alaska House for Concurrence

By MARY KAUFFMAN

April 08, 2017
Saturday PM

(SitNews) Juneau, Alaska - The Alaska Senate Majority passed what they say is a sustainable operating budget Thursday, reducing state spending by $276 million after a precipitous drop in the price of oil left the state with a multibillion-dollar budget shortfall. However, Senator Berta Gardner (D-Anchorage) says the Senate Republican Majority is choosing to balance the budget on the backs of kids, public health, foster kids, veterans, and working families.

And the Alaska Senate Majority states their savings were largely achieved by reducing spending on the state’s four most significant cost-drivers by five percent, including the Department of Health & Social Services, Education, the Department of Transportation and the University.

Rep. Dan Ortiz (I-Ketchikan) wrote in a letter to SitNews, "Their education plan cuts $69 million to the Base Student Allocation (BSA). This action doesn’t solve our fiscal crisis, but merely passes the burden to our local municipalities. Ketchikan schools would lose $1.4 million, Annette Island schools would lose over $260,000, and Wrangell schools would lose almost $200,000. Pupil transportation reductions would put another $226,000 on the chopping block in Ketchikan alone."

Rep. Ortiz wrote, "The Senate budget reduces funding for Pioneers Homes by $6.5 million or 12.7% in addition to reductions made over the last two years of $3.3 million Unrestricted General Funds. Staff position eliminations would be inevitable, and with less staff, fewer beds would remain open. As beds remain unfilled, revenues associated with an individual’s care – whether private insurance, individual assets, or Medicaid – will also diminish. The true reduction may be closer to $9 million. According to our local Pioneer Home director, this would result in the closure of two of our six Pioneer Homes throughout Alaska."

The Alaska Senate Majority’s version of the operating budget, House Bill 57, proposes $4.1 billion in unrestricted general fund (UGF) spending, which is down from a high of $8 billion in Fiscal Year 2013.

“If a family loses north of 60 percent of their income, they are going to have to tighten their belts,” said Sen. Lyman Hoffman (D-Bethel), co-chair of the Senate Finance Committee. “To help address the fiscal problem, we asked the state’s largest agencies to cut a nickel on the dollar.”

“Cutting is never easy, but it is necessary given our current fiscal situation,” said Sen. Anna MacKinnon (R-Eagle River), co-chair of the Senate Finance Committee. “The Senate Majority prioritized the needs of Alaskans in this budget. We will continue to look at legislation to reform the way government operates in order to further reduce spending through efficiencies and restructuring.”

The Alaska Senate Majority said in a news release their budget coupled with Senate Bill 26, will provide protection to the Permanent Fund. They said the Alaska House’s version of the budget, in contrast, proposes to draw $4.2 billion from the Permanent Fund’s earnings, totaling $1.7 billion more than the Senate’s $2.5 billion draw.

“The Senate made good on its promise to make further reductions to the budget and reduce the size and scope of government,” said Sen. Pete Kelly (R-Fairbanks), President of the Alaska Senate. “The Senate’s fiscal solution will protect the dividend, protect Alaskans from an income tax and protect the private sector.”

Senator Berta Gardner stated in a newsletter on April 7th, "After hours of debate, I voted no on this budget, because the Senate Republican Majority is choosing to balance the budget on the backs of kids, public health, foster kids, veterans, and working families. We need to think about our future as a state. We need a fiscal plan with new revenue that prioritizes education, health, and public safety. Until such a plan makes its way to the Senate, I cannot support it."

Gardner wrote this "Republican Majority’s proposed budget makes dramatic and damaging cuts to: Pre-K for at-risk children, K-12 public education, efforts to decrease domestic violence and sexual assault, frontline social workers for abused children, public health, the University of Alaska, and - no surprise here - holds harmless oil company subsidies. Obviously, not everything is on the table, just our children, the poor and sick, victims of sexual assault, our already stretched-thin teachers and social workers, and our university, most of which have already experienced significant cuts. Meanwhile, there is no consideration of oil tax subsidies for which next year’s bill will be a cool $1.37 BILLION when the state will earn production taxes of just $87 MILLION. While schools are denied the funding they need, the oil and gas industry rolls along untouched by cuts. The contrast could not be more stark."

Gardner wrote, "If we go back to the popular narrative of a household budget, it goes like this. You’ve cut your budget, you’ve used your savings to cover the rest, you’ve held on tight and scraped by hoping to make it through the recession, and you just found out that your primary source of income is set to decline for another 10 years. At this point, what would you do? You could stop buying school supplies for your kids, stop going to the doctor, and sell your car, or you could look for new sources of income."

The Senate Republican Majority's budget continues to cut government in all the wrong places, placing most of the burden on the backs of children and families. It places its bets on oil, despite the negative forecast wrote Gardner. Her caucus had presented 20 amendments to this budget to restore essential funding, as well as proposed over $300 million in cuts to oil tax credits and unnecessary services.

Gardner wrote, "Senate Republican leadership has repeatedly said of the state budget, “Everything is on the table,” but by the time the Senate’s Operating Budget (SB 57) hit the floor, it became apparent that those words were meaningless."

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